Notwithstanding some moves to manage the South China Sea disputes by having a Code of Conduct, the current developments, which are raising the level of tension among the different claimants, do not generate optimism for any positive outcome. An objective examination of the recent activities would suggest that situation is fast moving in the direction of a limited conflict, which would have the potentials of taking the shape of a large conflict with outside powers being drawn into the conflict.

At the outset it is important to state that India has a great stake in the South China Sea. Our entire trade with China, Japan, Vietnam, Philippines Indonesia, Malaysia, Brunei and 55% of trade with US passes through the South China Sea.

In the second half of June 2012, the Chinese cabinet had approved the establishment of prefectural level city of Sansha to administer the Paracel (Xisha) and Spratly (Nansha)island groups- both of these and their surrounding waters are under dispute in South China Sea. In addition, the People's Liberation Army's spokesperson Geng Yansheng at a press conference disclosed the Chinese plan to set up a military command in the Sansha islands.

A worrisome development is that China intends to intensify its propaganda for claiming the disputed bordering areas both on land and at sea. Recently it has been learnt that China has established a Steering Sub-Committee for guiding, coordinating and supervising, educating, propagating awareness of national map and controlling entire national map market with coordination of 13 Ministries which include National Agency for Geographic Information and Map Production, Committee for Propaganda and Instruction of the Communist Party of China, Ministry of Foreign Affairs, Ministry of Education, Ministry of Industry, Ministry of Public Security etc.

Washington, DC—The U.S. Senate unanimously passed a resolution (S. Res. 524) last night declaring that China’s recent actions to unilaterally assert control of disputed territories in the South China Sea “are contrary to agreed upon principles with regard to resolving disputes and impede a peaceful resolution.” Senator Jim Webb, chair of the Foreign Relations East Asian and Pacific Affairs Subcommittee, was an original cosponsor of the resolution and led an amendment addressing China's provocative actions. Last week, he urged the U.S. State Department to clarify whether China’s actions were a violation of international law.

As a Pacific nation and resident power, the United States has a national interest in the maintenance of peace and stability, respect for international law, freedom of navigation, and unimpeded lawful commerce in the South China Sea. We do not take a position on competing territorial claims over land features and have no territorial ambitions in the South China Sea; however, we believe the nations of the region should work collaboratively and diplomatically to resolve disputes without coercion, without intimidation, without threats, and without the use of force.

SECRETARY CLINTON: [...]One of the other issues we discussed in particular underscores the value of these multilateral institutions and also the importance of establishing clear regional norms, and that is the South China Sea. As you know, the United States has no territorial claims in the South China Sea, and we do not take sides in disputes about territorial or maritime boundaries, but we do have a fundamental interest in freedom of navigation, the maintenance of peace and stability, respect for international law, and unimpeded lawful commerce. And we believe the nations of the region should work collaboratively and diplomatically to resolve disputes without coercion, without intimidation, without threats, and certainly without the use of force.

SECRETARY CLINTON: We commend this week’s announcement that ASEAN and China have agreed on implementing guidelines to facilitate confidence building measures and joint projects in the South China Sea. This is an important first step toward achieving a Code of Conduct and reflects the progress that can be made through dialogue and multilateral diplomacy. We look forward to further progress.

SECRETARY CLINTON: [...] I’m sure you have followed the claims countries are making in the South China Sea. Although we do not have territory there, we have vital interests, particularly freedom of navigation. And I can report from the diplomatic trenches that as a party to the convention, we would have greater credibility in invoking the convention’s rules and a greater ability to enforce them.

SECRETARY CLINTON: [...]The United States, like every nation, has a national interest in freedom of navigation, open access to Asia’s maritime commons, and respect for international law in the South China Sea. We share these interests not only with ASEAN members or ASEAN Regional Forum participants, but with other maritime nations and the broader international community.

(From CSIS.org) The South China Sea and Asia Pacific in Transition - Exploring Options for Managing Disputes: The CSIS Southeast Asia Program hosted its second annual conference on Maritime Security in the South China Sea June 27-28, 2012.

The conference is a timely policy level discussion of the complex and important issues around the South China Sea. The program took place a week before Secretary of State Clinton departs for the ASEAN Regional Forum (ARF) and Post-Ministerial Conference (PMC) in Phnom Penh, Cambodia.